Luxembourg and Belgium removed from ‘grey list’

Luxembourg and Belgium have both been removed from an international ‘grey list’ of countries that refuse to share banking information for the purposes of taxation.

Their removal from the list means that they will escape further censure when governments evaluate in September whether countries are living up to their commitments to fight tax evasion.

Government officials from at least 60 countries are expected to attend a meeting on 1-3 September of the global forum on tax of the Organisation for Economic Co-operation and Development (OECD), the rich countries’ Paris-based think-tank. Leaders from the G20 group of industrialised and developing countries are also expected to assess progress on the fight against tax evasion at their summit in Pittsburgh on 23-24 September.

Austria is the only EU member state remaining on the list, but its government has written to other countries proposing the launch of negotiations on information-sharing.

G20 pressure

Luxembourg and Austria were among a number of countries to announce earlier this year that, in response to pressure from the G20, they would dilute their rules on banking secrecy. Both countries strongly criticised their inclusion on the grey list when it was first published in April, arguing that it broke a commitment made by other EU member states.

Belgium had committed itself, prior to the G20 crackdown, to sharing information by 2011.

Updated grey list

The list is managed by the OECD and the updated version was published on Friday (24 July). All of the countries remaining on the list have agreed – in principle – to share information, but have yet to do so in practice to any significant extent. The OECD’s benchmark for taking a country off the list is that the government must have signed information-sharing agreements with at least 12 countries, which is taken as a measure of seriousness of intent.

László Kovács, the European commissioner for taxation, has said that he hopes the moves towards increased transparency will enable the EU to implement fully its legislation on sharing bank data. EU law obliges countries automatically to share data on the taxation of savings income, but Luxembourg, Austria and Belgium were exempted from this obligation until San Marino, Monaco, Andorra, Liechtenstein and Switzerland have agreed to share this information with the EU on request.

All of these five non-EU countries are still on the OECD’s grey list. Between them, they have collectively signed a total of only four information-sharing agreements (two more than in April). The Swiss government announced on 24 July, however, that it has completed negotiations with 12 countries and that these agreements will be signed in due course. Liechtenstein is known to have opened negotiations with Luxembourg and the UK.

Level playing-field

A spokesperson for Kovács said that the Commission was continuing its efforts to secure European-level agreements with other countries “in order to ensure a level playing-field for all EU member states”. She said that a final agreement between the EU and Liechtenstein was expected in the autumn and that the Commission had requested, on 30 June, that member states allow it to open negotiations with Andorra, Monaco, San Marino and Switzerland.